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In the wake of the mighty fall of Apple Inc. (NASDAQ:AAPL) stock Thursday, many firms are putting out frantic downgrades on the company, and Jeffries is no different. Peter Misek, a managing director of the firm, took to CNBC Thursday morning to explain his company’s downgrade from “buy” to “hold” on the stock, and re-setting its price target from $800 down to $500.

First of all, Misek said his firm is actually late to the party, insisting it is not following the lead of other firms, but rather had seen this coming. “We had the data in December,” he said. “We should have downgraded (the stock) then. We are disappointed in ourselves and we’ll probably eat ourselves up much harder than anyone else could.”

But he continued: “We think there is more downside. We don’t think it’s too late (to sell).” He said the biggest piece of information he took out of the earnings call Wednesday evening was what he called the “iPhone deceleration.” He said the news was disappointing that the Apple Inc. (NASDAQ:AAPL) iPhone 5 inventory was “balanced” at four to six weeks after the device suffered supply “constraints” for most of the quarter. “We found that disappointing, and historically, product launches with that inventory, we think that is too low … and that, to us, indicated that demand has slowed.”

Misek went on to address the new way that Apple Inc. (NASDAQ:AAPL) is giving guidance. “It used to be that they would give us a single point and would exceed that point quite handily,” he said. “Now they give us a range and they seem to be implying that range is where they are going to land; and that range, quite frankly, was much lower than we were expecting.”

While Jeffries has been bearish for at least a month (unofficially), Misek did say there was still some optimist – that Apple Inc. (NASDAQ:AAPL) hasn’t yet hit the innovation “wall” more than a year after Steve Jobs’ death. “We still think innovation is alive and well at Apple,” he said. “We think there (are) some awesome products, but we just think they’ve made some bad choices. We think the choice on the screen size is costing them, but we lok forward to a TV, we look forward to a larger-screen iPhone very late this year or early next year.”

In closing, Misek predicted that Apple Inc. (NASDAQ:AAPL) may boost its dividend and increase its stock buyback program. “They have an embarrassment of riches in terms of cash,” he said. “They really can’t be looking themselves in the mirror and saying, ‘we need to build more cash.'” However, we added that he thinks the stock will hit $400 per share before it returns to the $500 level.

What do you think? Does Apple Inc. (NASDAQ:AAPL) still have downside risk? When do you think the ally will come, and what do you think the new high will be? We’d love your comments below.